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Monday, 17 September 1973
Page: 1055


Mr WHITLAM (Werriwa) (Prime Minister and Minister for Foreign Affairs) - I move:

That the Bill be now read a second time.

Under this Bill, the Government proposes to ask the people of Australia to approve an amendment to the Constitution to enable the Australian Parliament to control prices. Australians share at present with every comparable country a problem of price inflation. This Parliament possesses no comprehensive power over prices. The Government believes it is unreasonable that the Australian Parliament should lack a power possessed by the national parliament and national government of nearly every comparable country. We cannot obtain this power by any law of this Parliament or with any prospect of success by any other arrangement. Accordingly we wish to invite the people of Australia to confer that power upon their national Parliament. The Bill itself does not, cannot, give the power; it merely gives the people the chance to have their say. It gives the people the chance to say that they believe the Australian Parliament should have reasonable powers to ensure the best possible economic management of this nation.

Controls over prices are not a cure-all for inflation, but they can be used responsibly and selectively as one of the elements in an anti-inflationary strategy. They are no panacea, but an essential part of the treatment. In applying that treatment, the Australian Government has been active and effective over a broad front, from the time we took office and inherited a growing level of inflation. We inherited 'stagflation'. The great difference from the situation we inherited is that the economy in December combined a high inflation with the worst unemployment for 12 years. We now have a strong demand for labour, growth at 7 per cent and rising, and record profits. We have combined this strong and basically healthy economic situation with the most effective and far-reaching program of social reform ever undertaken in this country. Every section of the Australian community is better off today than 9 months ago. Our task now is to see that the even brighter prospects ahead for all Australians are not undermined by runaway inflation.

By vigorous and decisive actions on the currency, capital inflow and tariffs, by setting up the Prices Justification Tribunal and the

Parliamentary Committee on Prices, and above all, through the Budget- a remarkable combination of economic responsibility and far-reaching reform - we have erected excellent defences against such a misfortune. It is in that perspective, and the perspective of international economic pressures, that the Bill should be seen; it is in that perspective that the power the Government seeks from the people under this Bill should be seen. It should also be seen in the perspective of the events leading up to its introduction. At the Convention on the Constitution, a fortnight ago this afternoon, I outlined the various courses open to us. I said, and I repeat, that a prices freeze - and of course a price and income freeze - along the lines adopted by the American Administration was beyond the law in Australia. I said that I did not assert or concede that an effective prices policy could not be established under the corporations power, but that any action taken under that power would be subject to immediate, longlasting and debilitating appeals in the courts. I said that the Australian Government could seek a Constitutional change by referendum, but I acknowledged that the process takes some months, the number of months depending upon the behaviour of the Senate. Finally I said:

The Parliament can obtain the power by reference, by some or all State Parliaments. That is something which could be done in a matter of weeks. The reference of power could be permanent or temporary. If, however, the Governments in the two great States of New South Wales and Victoria, Governments which currently have a majority in both Houses of their Parliaments, decline to introduce a Bill, then the reference would be ineffective. I venture to say that without New South Wales and Victoria, it would be a largely futile exercise, while, with those two States alone referring, it could be made effective throughout Australia.

I have to say, to put it in the mildest way, that nothing in the public or private responses of the Premiers of New South Wales and Victoria - not to mention the Premier of Queensland - gives the slightest room for hope that they are prepared to refer such a power to the national Government. The Premiers of South Australia, Western Australia and Tasmania are willing; but, unlike the Governments of New South Wales and Victoria, they do not control their upper Houses and therefore they are not in a position to guarantee the support of their Parliaments.

So we have decided to go direct 'to the people of Australia. I should point out that, by this referendum, we do not ask the States to give up anything. We seek for the national Parliament a concurrent power. We are not seeking to take a power from the States and transfer it to the national Government. We seek a power for the national Parliament which the States already have, which they will retain, but which they either have refused to use or have been unable to use. All our experience from 1948 - political as well as economic shows that the States together or separately cannot apply effective price control, even were they willing to do so.

The oustanding example of the States' failure is the price of land. This is the outstanding commodity which is unaffected by wage costs, but it is the commodity subject to the greatest price increases. In all capital cities, the price of residential land has been rising much more rapidly than average weekly earnings and much more rapidly than the consumer price index. In Sydney, the annual rate of increase during the first three quarters of 1972-73 was 45 per cent.

The Australian Government has for some time been seeking the co-operation of the States in important new programs designed to relieve pressures and to stabilise prices. We have had some co-operation from New South Wales and Victoria in relation to acquisition of land for Albury and Wodonga and the South Australian Government has taken measures to slow down the rate of inflation in land in Adelaide. But where the major problems lie - the provision of new residential land in the outer suburbs of the great cities - it has to be said that the States have been either unable or unwilling to apply effective measures.

In approaching this or any other reform of the Constitution, I have to take account of the realities. Before I put the nation to the trouble and expense of a referendum, I want to give it the maximum chance of success. This is the basic approach I took at the Constitutional Convention in Sydney a fortnight ago. I announced to the Convention a number of proposals the Government intends to put to the people at the next elections, whenever they are held, whether for the Senate, or both Houses. These are Constitutional matters in the strictest sense. The referendum now proposed is not one such, for it involves important economic policy matters. Therefore, if this proposal is to be given the maximum chance of carrying, it is best that it should stand alone on the day of decision - for the people to judge on its merits, without political entanglements.

There is one other great consistent approach we have on this matter. We acknowledge the basic duty and responsibility of the national Government for economic management. I do more than acknowledge it; I assert that responsibility. We do however recognise how much we depend upon the cooperation of all sections of the community, and upon the force of public opinion. We wish the Government to be able to act on the public recommendations of public bodies, publicly arrived at. We recognise, for example, that the effectiveness of the Prices Justification Tribunal partly depends upon its persuasive powers, working through informed public opinion. Yet it will help the effectiveness of the Tribunal immeasurably if the people know it is backed by a comprehensive and undoubted power, as is sought through this proposal. Such a power will increase public confidence in the Tribunal.

The importance of tribunals is already accepted, and has been accepted for generations, in the case of incomes. And, if the power we now propose for the national Parliament is granted by the people, it will increase the confidence of those who have to work through the industrial tribunals for their wage and salary increases. The effectiveness of the industrial arbitration system itself will be increased if those who have to operate within it know that there is a reserve power, with a government willing to exercise that power, to prevent their hard-won increases being filched by unjustified rises resulting in unfair profiteering. The 90 per cent of the Australian work-force who depend for their incomes upon such decisions and such tribunals do not at present have that confidence. This power would provide that additional element of confidence. There will be complete co-operation from employees associations if that confidence is present. In saying that, I speak for the whole Labor movement. I believe the people will support this referendum. It would be an additional insurance, however, if the members of the Opposition were to show their sincerity and support of it too.

I confess that I am at a loss to know how to satisfy the Leader of the Opposition (Mr Snedden). As Minister for Labour and National Service he was all for a prices tribu nal; as Treasurer he was all against it. As Treasurer he was all against a prices and incomes policy; as Leader of the Opposition he is all for it. At the same time, as leader of the Opposition he is all against the national Parliament having power to implement a prices and incomes policy. Sometimes he says that the national Parliament should not be trusted with power over prices and sometimes he says that the national Parliament should have a double power or twice the power - over both prices and incomes. I toss and turn at night seeking ways to keep him happy because I know that if I can make him happy I have won more than half the battle by bringing a glimmer of contentment to the greatest whinger and knocker ever to be put at the head of a great Australian political party. I now open a door to the Leader of the Opposition to retrieve his reputation as a good Australian.

This is a measure which I believe will receive the endorsement and support of the Australian people - when it is put to them. For the moment, all we are asking is a chance for the people, a chance for them to have their say. That is all this Bill proposes - that the people should decide. We believe the national Parliament of Australia should have a power possessed by every other national parliament, particularly when it comes to dealing with an international problem. And we believe - and say so by this Bill - that the people should make their judgment upon those 2 propositions. On these grounds I commend the Bill to the House.

Debate (on motion by Mr Snedden) adjourned.







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